Investigating the Transmission Channels behind Dutch Disease Effects : Lessons from Mongolia Using a CGE Model

Khan, Tehmina S. ; Gottschalk, Jan

World Bank, Washington, DC

关键词: CGE MODELS;    DUTCH DISEASE;    NATURAL RESOURCES;    MAMS;    MINING;   

DOI  :  10.1596/1813-9450-8183
RP-ID  :  WPS8183

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper uses a computable generalequilibrium model -- Maquette for Millennium DevelopmentGoal Simulations (MAMS) -- calibrated to Mongolia toinvestigate how the development of major mining projectsleads to Dutch disease. The simulations suggest that theprocess is complex, with the relative strength of thedifferent spending and resource movement channels determinedby structural features of the economy, such as factor inputneeds of the mining sector and substitution elasticities,and how mineral windfalls are eventually spent. In Mongolia,mining sector demand for domestic factor inputs explainstwo-thirds of the appreciation of the real exchange rate,with demand for labor, a "quasi-fixed" factor, themost potent channel for transmitting Dutch disease. Thesimulations also suggest that public policies may only playa limited role in limiting Dutch disease, even if growingfiscal revenues are channeled toward productivity-enhancingpublic investment rather than public consumption or lowertaxes. This finding suggests that policy makers face realtrade-offs, namely that, as an equilibrium response, Dutchdisease is unavoidable and at odds with an export-led,manufacturing-oriented development strategy unless resourcesare left in the ground (or mining earnings are savedabroad). If the objective is to limit Dutch disease, thenthe simulations point to policies that minimize the usage ofdomestic inputs by the mining sector, or that accommodatethe growing demand for key inputs such as labor e.g. throughimmigration. Regarding spending, policy makers shouldchannel mining revenues toward public investment, to expandthe economy's long-run supply potential. Where largedirect income flows from the mining sector to households areimportant, monetary policy may be more useful than fiscalpolicy in constraining private spending.